Bankruptcy in PEI
Comprehending the economic state of Canadian residents is unpredictable. However, in certain provinces, the data are diverse, which makes it difficult to access the accuracy of consumer debt. One of such provinces is Prince Edward Island. The statistics show significant signs in terms of the economic condition of PEI. For several years, the trend reveals that the residents of PEI exhibit a decrease in their spending per year.
In 2011, for instance, the amount spends on household necessities triggers a drop of $500 from the year before. This is somehow compelling considering that the amount spent on households across Canada exhibits an increasing number. On the contrary, some undesirable signs indicate that most of PEI residents are seeking assistance to manage their dents every month. Those who exhaust all means would likely consider filing for bankruptcy in PEI
The Basic Facts of PEI Bankruptcy
The bankruptcy process for an individual is established by Canadian law; it stipulates that for any reason an individual is unable to pay their monthly obligation, they are entitled to seek debt solutions. The last to consider among these debt solutions is filing for bankruptcy in PEI. Most of the residents in PEI consider debt consolidation, debt settlement, consumer credit counseling, and a consumer proposal, before filing for bankruptcy.
Furthermore, bankruptcy does not only qualify individuals with 10 digits of debts. If you’re a resident of PEI, you may qualify for bankruptcy as your last alternative granted your debts amounts to not lesser than $1,000 of unsecured debts. However, considering such amount to qualify over the potential cost in bankruptcy, it would be better to seek some other debt relief
PEI Bankruptcy Exemptions
In cases, wherein a consumer proposal or other debt relief approach fails, you can then file for bankruptcy via a licensed bankruptcy trustee. Your trustee will conduct an assessment of your financial status to check your qualifications. Once you qualify, a trust will be set up your trustee where your property except hose in exempt will be deposited. The proceeds will be used to pay your creditors and lenders. If in case, your property is large enough to cover your debts, you will get the remainder of the proceeds.
On the other hand, contributions to your registered retirement savings plans are exempt from all provinces. However, you will be urged to surrender the contribution for the past 12 months to your trustee. Also, bankruptcy in PEI sets its own exemptions in line with the federal law in Canada, some of which are listed as follows:
Pros and Cons of PEI Bankruptcy
Pros
- eliminates unsecured debts
- prohibits the collection of your debts
- will aid you in preparing you future financial strife through credit counseling
- a way to rebuild your finances for the second time
Cons
- do not erase your secured debts
- damages your credit report for 7 years or more
- some of your assets will be disposed
- may potentially affect your employment application
- abstinence from your position as a director of the corporation or business
- will hinder you to secure a new loan or credit card
- do not erased your secured debts
